By on August 3, 2017

2017 Honda Civic hatchback - Image: HondaCanadian auto sales jumped 5 percent in July 2017, a big jump for an industry that has now posted growth in six of 2017’s first seven months.

Year-to-date, sales are well ahead of 2016’s pace: 58,000 units greater than in the first seven months of 2017. In fact, on a quest for the Canada’s first ever year of more than 2,000,000 sales, the industry would now need a genuine downturn in 2017’s final five months to avoid a hugely successful year.

More proof that the Canadian auto industry’s on a hot streak? Even passenger car sales are… well, they’re only down slightly.

After reporting 5-percent growth in 2017’s first seven months, year-over-year, Canadian auto sales would now need to decline by roughly 8,000 units between August and December for auto sales to fall short of the 2-million marker. Canadians purchased and leased nearly 1.95 million new vehicles in a record 2016, 3-percent up on the prior record from 2015.

Yet while passenger car sales took a 7-percent hit in the 2016 calendar year, the rate of decline is now slowing as car volume plateaus. The sector now earns slightly less than one-third of the market, having lost 2 percent of its volume in the first seven months of 2017 despite surging bestsellers. The Honda Civic, which will make 2017 its 20th consecutive year as Canada’s top-selling car, is on track for its best year ever. The second-ranked Toyota Corolla sedan is up 8 percent compared with 2016.

While the lack of plunging car sales has caused less harm to the Canadian auto industry’s overall totals than expected, the real boost to total volume is obviously from trucks and SUVs/crossovers.

Pickup truck sales jumped 14 percent in the January-July period and now account for 21 percent of the overall market. Ford is on track for significantly more than 150,000 F-Series sales, having only crested the 100,000-sale barrier for the first time in 2012. FCA’s Ram truck line and GM’s full-size twins are all set for best-ever years, as well.2016 Toyota RAV4 - Image: ToyotaThen there’s a 7-percent year-to-date increase in sales of SUVs/crossovers, which have grown their share of the market to 40 percent in 2017. Led by the Canadian-made Toyota RAV4 and its modest 2-percent improvement, and the Canadian-made Honda CR-V and its substantial 12-percent increase, 19 of the 25 top-selling utility vehicles in Canada are selling more often this year than last.

Not every auto brand is coming up roses in 2017. Fiat Chrysler Automobiles has fallen marginally because of drops at Chrysler, Dodge, and Jeep. Hyundai volume is down 9 percent this year. Volkswagen has reported major improvements in the summer but remains down 3 percent compared with last year’s four-year low.

Ford Motor Company, which generates just under half of its Canadian sales with F-Series trucks, is Canada’s top-selling manufacturer by a margin of 11,590 sales over General Motors. Ford is also the top-selling brand. No volume brand is growing faster than GMC, up 19 percent this year. On the other end of the ledger, Jeep’s 16-percent decline is the harshest drop.

Auto Brand July 2017 July 2016 % Change 2017 YTD 2016 YTD % Change
Ford 26,927 29,007 -7.2% 182,935 174,859 4.6%
Toyota 16,943 16,389 3.4% 119,062 119,360 -0.2%
Honda 16,843 15,214 10.7% 106,981 95,539 12.0%
Chevrolet 14,519 12,468 16.5% 100,281 85,861 16.8%
Nissan 11,807 10,641 11.0% 80,603 74,463 8.2%
Hyundai 12,443 14,600 -14.8% 79,322 87,225 -9.1%
Ram 7,514 8,323 -9.7% 68,505 59,783 14.6%
GMC 8,425 6,669 26.3% 57,577 48,518 18.7%
Dodge 5,569 7,748 -28.1% 50,299 52,273 -3.8%
Jeep 9,842 7,429 32.5% 44,317 52,926 -16.3%
Kia 7,506 6,527 15.0% 44,240 42,845 3.3%
Mazda 6,591 5,909 11.5% 43,098 40,200 7.2%
Volkswagen 7,823 5,675 37.9% 36,189 37,397 -3.2%
Subaru 4,454 4,210 5.8% 30,887 28,125 9.8%
Mercedes-Benz 4,297 3,881 10.7% 30,587 27,368 11.8%
BMW 2,953 3,007 -1.8% 21,783 21,693 0.4%
Audi 3,179 2,451 29.7% 21,383 18,065 18.4%
Lexus 2,018 1,883 7.2% 14,182 12,322 15.1%
Mitsubishi 2,078 1,600 29.9% 13,368 13,138 1.8%
Acura 1,701 1,655 2.8% 11,066 10,861 1.9%
Buick 1,685 1,249 34.9% 10,860 10,751 1.0%
Chrysler 356 912 -61.0% 9,653 10,640 -9.3%
Cadillac 1,223 869 40.7% 7,630 6,327 20.6%
Infiniti 981 906 8.3% 7,121 6,585 8.1%
Land Rover 734 664 10.5% 5,269 5,406 -2.5%
Lincoln 723 764 -5.4% 5,003 4,754 5.2%
Porsche 770 738 4.3% 4,579 4,041 13.3%
Mini 587 640 -8.3% 3,899 3,831 1.8%
Volvo 612 590 3.7% 3,811 3,707 2.8%
Jaguar 370 331 11.8% 2,827 1,371 106%
Fiat 104 250 -58.4% 1,963 1,442 36.1%
Maserati 84 45 86.7% 826 313 164%
Alfa Romeo 82 7 1,071% 304 44 591%
Genesis 55 273
Smart 36 53 -32.1% 219 653 -66.5%
Industry Total †

Source: Global Automakers Of Canada

[Image: Honda, Toyota]

Timothy Cain is a contributing analyst at The Truth About Cars and and the founder and former editor of Follow on Twitter @timcaincars.

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17 Comments on “U.S. Auto Industry Slowdown, Eh? Canadian Auto Sales on Track for Fifth Consecutive Record Year After Big July...”

  • avatar

    Cars sales holding better in Canada vs. United States when compared to crossover sales?

    Guess Canadians aren’t as fad driven as Americans.

    • 0 avatar

      It also likely means that our Neighbors to the North are driving around with FWD in the winter just fine (calling back to J.B. AWD article.)

      • 0 avatar

        Or they buy cars with AWD? Nah that can’t be it.

        MISSISSAUGA, ON, Aug. 1, 2017 /CNW/ – Subaru Canada, Inc. (SCI) is pleased to announce its best ever July sales with results up 5.8 percent and 4,454 units retailed. With sales of 30,887 year to date Subaru is well positioned to surpass 2016’s annual sales record of 50,190 units.

        And Audi is also up 20%ish YOY.

    • 0 avatar

      From data for 2016, Canada’s crossover to car sales ratio is higher than it is in the US.

  • avatar

    Canada’s housing market is in free fall. 2% of Canada’s entire economy is based on selling houses. For a comparison at the height of the US housing bubble of the 2000s, only 1.5% of our economy was based on housing. And we know what happened when housing started tanking here.

    Canada’s about to hit a nasty recession and car sales will plummet soon enough.

    • 0 avatar

      Oversimplification… US Banks were on the brink of failure (or did, looking at you Lehman). Canada’s real estate bubble will burst but the Canadian banks are in much better shape than the US ones at the start of the great recession. A recession is always right around the corner, but likely not a Great Recession.

      • 0 avatar

        The housing crash wasn’t caused BY Lehman. Lehman was a symptom of the crash.

        The Canadian bubble will crash for the same reason the US bubble (and all real estate bubbles) crashed…..too much speculation, cheap credit, prices out of whack with incomes. When a 2 bedroom condo in Toronto costs $1M+, it doesn’t take a PhD in finance to know what’s coming. It won’t be pretty.

        A sample:

        “In June of 2016, there were $9.55 billion-worth of transactions in Toronto’s market; by June of 2017, that had dropped to $6.33 billion. Sales fell by an even larger 37.7 per cent, helping to push down nationwide sales by 6.7 per cent in June, CREA said. It was the largest drop Canada’s housing market has seen in seven years.”

        That is a huge loss of economic activity that will have a nasty ripple thoughout the entire economy. And it’s only starting….

        • 0 avatar

          Dream on. First, there is no “Canadian bubble” because there is no Canadian market. Real estate is local – especially in Canada, where there are vast distances between urban areas and major differences in the economies of the different provinces.

          There has been a frenzy in Vancouver and Toronto, which has largely abated (assisted in Toronto by the usual summer doldrums). But the fundamentals of the Toronto market have not changed – net inbound migration to the GTA is around 100,000 people per year, which creates demand for about 70,000 new housing units per year. That is continuing.

          Then, consider that people generally prefer to live in the City itself, and that new construction of single-family homes in Toronto is less than 1,500 per year. Add to this that almost all of that new construction is replacement of houses that get torn down so a bigger one can be built.

          Then add to that that the vacancy rate on rental units in the City is less than 1%, which adds to overall demand.

          Then consider that inventory of new condos in Toronto is at about 20% of what the market considers “healthy” (60 days vs. 10 months).

          Then consider that the mortgage delinquency rate in Toronto was 0.12% at the end of 2016, and 0.34% nationally. Compare that to the 7-12% rates experienced in the US in 2007-2008.

          Then consider that Canada’s GDP is on track to grow by about 3% in 2017, people have jobs and mortgage money is both cheap and widely available.

          Since I moved to Toronto in 2002, people have been telling me that Toronto real estate prices are unsustainably high and therefore bound to fall. Reality is that the long-term rate of increase has been in the range of 6-8% per annum. The 20-30% increase seen on 2016 are unsustainable, but the long-term averages reflect the realities of the market. Which makes Toronto real estate a pretty good investment.


          • 0 avatar

            Thank you for that ect, it’s a complex argument that you made well. Now about Montreal…

        • 0 avatar

          The housing bubble/crash in the US was caused by Wall St. and the big mortgage lenders – with the damage multiplied many times over by the use of financial derivatives such as credit default swaps.

          Wall St. knew that much of the paper they were bundling and selling to investors were junk, but didn’t matter to them as they were making a mint on both ends (would turn around and BET against these investments that they touted as “safe”).

          Unlike the US and UK, places like Canada, Australia and Germany didn’t see nearly the same fall-out as they have stringer regulations on their banking/finance system.

          • 0 avatar

            Also, reason why we have seen the respective political fall-outs in the US and the UK (with the populations most hurt by the actions of their politicians exacerbating the problem).

  • avatar

    Of the 36 million + population of Canada, 23 million of us live where they use huge quantities of salt on the roads. Where I live they soak the roads, and streets with a concoction of brine?? before the first snowflake falls.

    As a consequence a vehicle, any vehicle not treated with an oil based rust inhibitor is junk somewhere around the 12-13 year mark. Annual treatments may buy you another 5 years?

    It gets cold, real cold, here. Outside of the huge cities public transportation is pretty well non-existent.

    Reliable transportation is close to being a necessity of life. In the rural areas of Ontario, Quebec, Nova Scotia, PEI, Newfoundland,even folks of modest means will have a late model truck in the driveway.

    I’m not shocked that new vehicles are flying off the lots..I am a little concerned of where the money is coming from. As “I_like_stuff” mentioned, folks using their property as ATM machines, is going to have some nasty consequences.

    • 0 avatar

      > I’m not shocked that new vehicles are flying off the lots..I am a little concerned of where the money is coming from. As “I_like_stuff” mentioned, folks using their property as ATM machines, is going to have some nasty consequences.

      For years now the CDN Banks have been handing out lines of credit like Canada; even if you don’t want any, they will do their best to cajole or FUD you into having some.

  • avatar

    I never get use to the exotic status of Volvos in Canada. Considering the similarity in climate, nature and, in part, even attitudes and lifestyles, it baffles me how Volvo doesn’t sell ten times as many cars in Canada. They even used to have a factory there.

  • avatar

    ” It baffles me how Volvo doesn’t sell ten times as many cars in Canada ” First off, despite the intentions of many, we”re more American than we are Northern Europeans. Secondly, Volvo peaked here in the 70’s and never recovered. Then there is the fact that dealers are few, and far between.

    • 0 avatar

      The real problem for me is how much more expensive the Volvo is compared to Subaru for function, and compared to BMW for luxury interiors. BMW does that bargain-basement lease thing and so Bimmers are kind of common, where Volvo don’t have much brand here and are more expensive on a monthly payment or sometimes competitive.

      Add to that the related fact that there is no amazing entry-level model here now…Volvo is very niche. Some used ones are good deals; I say all this as someone who really wanted / wants a Volvo, I’m going to wind up in a Golf R or VW all-trak for less money than the base V60. Sadly.

  • avatar

    Canadians, Australians, the British and Kiwis are absolute debt’slaves, even models than Americans, which is a massive accomplishment (though it’s also possible that the far more heterogeneous makeup of American ethic/racial society puts additional limits on ability to dive as deeply into debt as may be the case in the far more homogeneous ethnic/racial societies of Canada, Australia, the UK and New Zealand).

    During tne next financial/economic downturn, Canada, Australia, the UK and New Zealand will see sharper declines in bond, real estate and equities prices than in the US.

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